Press Release
04.02.2025
Directorate of Enforcement (ED), Chennai has conducted search operations at three locations
in Chennai, targeting premises linked to Smt. Andal Arumugam, S. Arumugam and others as part of the
ongoing investigation into M/s RKM Powergen Private Limited (RKMPPL ) under the provisions of
Prevention of Money Laundering Act (PMLA), 2002.
ED initiated investigation on the basis of an FIR registered by the Central Bureau of Investigation
(CBI), EOW, New Delhi. The case pertains to the alleged fraudulent acquisition of the Fatehpur East
Coal Block in Chhattisgarh, allocated by the Ministry of Coal for the power sector.
ED investigation reveal that RKMPPL secured a loan from the Power Finance Corporation (PFC)
based on the coal block allocation. A significant portion of these funds Rs. 3,800 Crore was transferred
to a foreign entity, M/s MIPP , controlled by RKMPPL, for the purchase of overvalued plant and
machinery. Further investigation revealed that following the coal block allocation, RKMPPL issued 26%
of its shares to Malaysia -based M/s Mudajaya Corporation Bhd. and 10.95% to Enerk International
Holdings Ltd., both at a premium of Rs. 240 per share. In contrast, 63.05% of shares were all otted to
M/s R K Powergen Pvt. Ltd. at face value. The valuation methodology lacked transparency, and the
Chartered Accountants' fair valuation assessment was not applied consistently.
Subsequent investigation found that M/s Mudajaya Corporation funded its Rs. 240 per share
premium by rerouting PFC -sanctioned funds intended for equipment procurement from M/s MIIP
International, a subsidiary of Mudajaya Corporation. This effectively resulted in the round -tripping of
project funds. An estimated Rs. 1800 Crore was systematically routed back to RKMPPL through foreign
entities under the guise of equity participation.
During the search operations, multiple mobile phones and electronic devices containing
substantial incriminating evidence were seized. Additionally, under Section 17(1)(A) of PMLA, freezing
orders were issued for fixed deposit receipts (FDRs) and Mutual funds amounting to Rs 912 Crore and
Key documents related to immovable properties, collectively valued at approximately Rs. 1000 Crore,
were also seized.
Further investigation is under progress.
